Chinese Premier Li Exits Leadership Body as Xi’s Power Grows

(Bloomberg) -- Premier Li Keqiang left his position in China’s top leadership body early as President Xi Jinping consolidates control over the world’s No. 2 economy.

Li, 67, wasn’t included in the Communist Party’s new 200-member Central Committee, a requirement for joining the more powerful Politburo and its supreme Standing Committee. That marks an end to Li’s decade as China’s No. 2 official, and a long career that at one point saw him in the running to lead the nation -- a role he lost to Xi. 

While Li announced earlier this year he’d step down as premier next March, in line with the position’s two-term limit, he was still young enough for a fourth stint on the seven-member Politburo Standing Committee. Xi, 69, tore up age norms governing retirement at the close of the party congress meeting in Beijing, breaking the de facto age cap of 68 en route to a precedent-breaking third term in office.

Contender for the premier role Wang Yang, 67, also exited early, clearing a path for Xi loyalists more compliant with his directives to take the role. Li, a trained economist, saw his push for more liberal policies in some sectors stymied as Xi increased the party’s role over the government in policy making -- a division the party had emphasized following Mao Zedong’s chaotic rule that ended with his death in 1976.

Li could be remembered as “one of the least powerful premiers in recent Chinese history,” said Chen Gang, assistant director of the East Asian Institute at the National University of Singapore.

“While we seldom hear any criticism of him for any mistakes or errors, in China politics decides everything,” Chen said. “Li became the premier as Xi Jinping was consolidating his power. There was some conflict between party and the state.”

In China, the premier leads the State Council and co-ordinates all government ministries, while the president serves as head of state. Xi also heads the party and is commander-in-chief of the military. 

Li’s reputation as a relatively liberal official took hold in the 1980s, when he translated English works on constitutional law by a British judge. He later studied for a doctorate in economics under one of China’s leading advocates for market reform.

Seen as a protégé of former leader Hu Jintao, Li then ascended the political ladder via challenging stints as party chief in the provinces of Liaoning and Henan. In Henan, he oversaw strong growth, but also presided over a blood donation scandal that infected rural residents with HIV.

After losing out to Xi for the role as president, Li became premier and carved out a policy platform based on cutting red-tape and taxes on business. He also championed “new style urbanization,” which encouraged city growth to be linked with the provision of employment and public services.

But Li’s role diminished once Xi moved key economic policy decisions to a series of party committees led by himself and his trusted economic aide, Liu He. Li in turn spent much of his time responding to crises and ensuring that officials followed the Chinese leader’s decisions. 

“I think Li Keqiang very early on recognized the realities of his position and adapted to it without getting on the wrong side of Xi,” said Dylan Loh, assistant professor at Nanyang Technological University. “This year he’s been a bit more open with talking about stuff. That could be because he’d decided to retire.”

China’s Covid Zero policy of using lockdowns to eliminate the virus has fueled speculation of a policy divergence between Xi and Li. Earlier this year, the premier held a rare video call with thousands of cadres to warn of a severe economic crisis and urging them to keep the economy growing. That message appeared to diverge from Xi’s emphasis on the need to push for zero Covid cases, leading to confusion among officials on the ground.

With Li’s departure, Xi could further diminish the role of the premiership. His ally and Shanghai party chief Li Qiang is a leading candidate for the post despite overseeing a two-month Covid lockdown in Shanghai that led to rare social unrest and shrank the city’s economy by almost 14%.

The installation of Hu Chunhua, whose early career didn’t overlap with Xi, however, could signal the Chinese leader wants to show unity with retired leaders who have traditionally held sway behind the scenes.

Whoever fills Li’s shoes, one thing is clear: Xi will call the shots.

“Xi Jinping is obviously a strong man, a strong leader,” said Edwin Lai, a Hong Kong University of Science and Technology Economics Professor and associate director of Center for Economic Policy. “In the future, the premier will have to play second fiddle.”

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